Can an employer reduce your salary if they demote you to a lower management postion?

UPDATED: Aug 16, 2012

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Can an employer reduce your salary if they demote you to a lower management postion?

Could an employer ask you to take a paycut back down to the salary of 6 years ago? And, if you don’t take the cut in pay, could they ask you to work more than the 45 hours that you work on salary?

Asked on August 16, 2012 under Employment Labor Law, Pennsylvania


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Actually, yes your empoyer can do this. The fact is that unless you have an employment contract, union agreement or specific company policy that probitis such a decrease, it is perfectly legal to reduce an employee's salary. In an "at will" employment relationship, an employer can set the terms and conditions of employment much as it sees fit. For their part, an employee can continue to work for an employer or not, their choice. Additionally, a reduction of wages must not be due to some form of actionable discrimination.

However, if you are a "non-exempt" employee (your state's department of labor's website or the US Department of Labor's website will explain), you cannot be paid less then federal minimum wage. Also, to the extent additional hours put you into ovetime you must be paid accordingly.

Note: A salaried employee is typically considered to an exempt employee (but not always). If you are such an employee then OT and minimum wage laws do not apply. Again, refer to the 2 above-mentioned websites for further explanation.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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